Gross collections were $124.5 million, a 32% increase over the $94.4 million in the same period of the prior year. Excluding portfolio sales, collections were $124.5 million, a 34% increase over the $92.8 million in the same period of the prior year.

Investment in receivable portfolios was $41.0 million, to purchase $1.0 billion in face value of debt, compared to $63.8 million, to purchase $1.7 billion in face value of debt in the same period of the prior year. Available capacity under the revolving credit facility, subject to borrowing base and applicable debt covenants, was $75.0 million as of December 31, 2009. Total debt, consisting of the revolving credit facility, convertible notes and capital lease obligations, was $303.1 million as of December 31, 2009, consistent with the $303.7 million as of December 31, 2008.

Revenue from receivable portfolios was $77.0 million, a 61% increase over the $47.9 million in the same period of the prior year. This increase was due largely to the differences in net impairment provisions recorded in each period, as discussed below in additional information. Excluding net impairment provisions, revenue from receivable portfolios increased 12%. Revenue recognized on receivable portfolios, as a percentage of portfolio collections, excluding the effects of impairment provisions, was 66%, compared to 78% in the same period of the prior year.

Revenue from bankruptcy servicing was $4.5 million, a 12% increase over the $4.0 million in the same period of the prior year.

Total operating expenses were $64.6 million, a 19% increase over the $54.2 million in the same period of the prior year. Operating expense (excluding stock-based compensation expense and bankruptcy servicing operating expenses) per dollar collected decreased to 48.5%, compared to 53.6% in the same period of the prior year.

Adjusted EBITDA, defined as net income before interest, taxes, depreciation and amortization, stock-based compensation expense and portfolio amortization, was $66.1 million, a 34% increase over the $49.3 million in the same period of the prior year.

Total interest expense was $4.0 million, compared to $5.4 million in the same period of the prior year.

Net income was $8.4 million, or $0.34 per fully diluted share, compared to a net loss of $2.1 million, or $0.09 per fully diluted share in the same period of the prior year.

Tangible book value per share, computed by dividing total stockholders’ equity less goodwill and identifiable intangible assets by the number of diluted shares outstanding, was $9.23 as of December 31, 2009, a 17% increase over $7.86 as of December 31, 2008.

Gross collections were $487.8 million, a 22% increase over the $398.6 million in 2008.

Total revenue was $316.4 million, a 24% increase over the $255.9 million in 2008.

Total operating expenses were $249.8 million, a 15% increase over the $216.9 million in 2008. Operating expense (excluding stock-based compensation expense and bankruptcy servicing operating expenses) per dollar collected decreased to 47.6% compared to 50.2% in 2008.

Adjusted EBITDA was $264.6 million, a 27% increase over the $208.0 million in 2008.

Net income was $33.0 million, or $1.37 per fully diluted share, compared to net income of $13.8 million or $0.59 per fully diluted share in 2008.

In the fourth quarter of 2009, the Company recorded a net impairment provision of $5.0 million, compared to a net impairment provision of $25.4 million in the same period of the prior year. For the full year of 2009, the Company recorded a net impairment provision of $19.3 million, compared to a net impairment provision of $41.4 million in the prior year.

For the full year of 2009, the Company expensed $43.6 million in upfront court costs, compared to $38.5 million in the prior year.

In 2009, the Company repurchased $28.5 million principal amount of its outstanding convertible notes, for a total price of $22.3 million, plus accrued interest. These repurchases resulted in a gain of $3.3 million. In 2008, the Company repurchased $28.6 million principal amount of its outstanding convertible notes, for a total price of $20.1 million, plus accrued interest. These repurchases resulted in a net gain of $4.8 million.

For the full year of 2009, general and administrative expenses increased by $7.5 million, to $26.9 million, compared to $19.4 million in the prior year. The increase was primarily the result of an increase of $5.3 million in corporate legal expenses related primarily to our settled Jefferson Capital arbitration and other ongoing litigation, an increase of $1.2 million in corporate settlements and an increase of $0.9 million in building rent, primarily in India, where we incurred rental charges at two locations, as we built out a larger site.

Assets

Cash and cash equivalents

Accounts receivable, net

Investment in receivable portfolios, net

Deferred court costs

Property and equipment, net

Prepaid income tax

Forward flow asset

Other assets

Goodwill

Identifiable intangible assets, net

Total assets

Liabilities and stockholders’ equity

Liabilities:

Accounts payable and accrued liabilities

Income taxes payable

Deferred tax liabilities, net

Deferred revenue and purchased servicing obligation

Debt

Other liabilities

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value, 50,000 shares authorized, 23,359 shares and 23,053 shares issued and outstanding as of December 31, 2009 and 2008, respectively

Additional paid-in capital

Accumulated earnings

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenue

Revenue from receivable portfolios, net

Servicing fees and other related revenue

Total revenue

Operating expenses

Salaries and employee benefits (excluding stock-based compensation expense)

Stock-based compensation expense

Cost of legal collections

Other operating expenses

Collection agency commissions

General and administrative expenses

Depreciation and amortization

Total operating expenses

Income before other (expense) income and income taxes

Other (expense) income

Interest expense

Gain on repurchase of convertible notes, net

Other income (expense)

Total other expense

Income (loss) before income taxes

(Provision for) benefit from income taxes

Net income (loss)

Weighted average shares outstanding:

Basic

Diluted

Earnings (loss) per share:

Basic

Diluted

Operating activities:

Net Income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Amortization of loan costs and debt discount

Stock-based compensation expense

Gain on repurchase of convertible notes, net

Deferred income tax expense

Excess tax benefit from stock-based payment arrangements

Provision for impairment on receivable portfolios, net

Changes in operating assets and liabilities

Other assets

Deferred court costs

Prepaid income tax and income taxes payable

Deferred revenue and purchased service obligation

Accounts payable, accrued liabilities and other liabilities

Net cash provided by operating activities

Investing activities:

Purchases of receivable portfolios, net of forward flow allocation

Collections applied to investment in receivable portfolios, net

Proceeds from put-backs of receivable portfolios

Purchases of property and equipment

Net cash used in investing activities

Financing activities:

Proceeds from notes payable and other borrowings

Repayment of notes payable and other borrowings

Repurchase of convertible notes

Proceeds from exercise of stock options

Excess tax benefit from stock-based payment arrangements

Proceeds from capital lease

Repayment of capital lease obligations

Net cash provided by financing activities

Net increase (decrease) in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental disclosures of cash flow information:

Cash paid for interest

Cash paid for income taxes

Supplemental schedule of non-cash investing and financing activities:

Fixed assets acquired through capital lease

Allocation of forward flow asset to acquired receivable portfolios

GAAP net income (loss), as reported

Interest expense

Provision for (benefit from) income taxes

Depreciation and amortization

Amount applied to principal on receivable portfolios

Stock-based compensation expense

Adjusted EBITDA

GAAP total operating expenses, as reported

Stock-based compensation expense

Bankruptcy servicing operating expenses

Operating expenses, excluding stock-based compensation expense and bankruptcy servicing operating expenses

GAAP total stockholders’ equity, as reported

Goodwill

Identifiable intangible assets, net

Tangible book value

Diluted shares outstanding

Tangible book value per share